A Tune-up For Your Consumer
While innovative companies look to new segments for growth, many companies do not question whether their existing consumer segments have changed. They may never ask what changed or why purchase behavior declined. During turbulent economic times, this is a mistake. And it is particularly troublesome if you are targeting mature consumers today with a strategy that pre-dates 2008.
The new normal
Our current research indicates that in spite of reports that we are in recovery, older-consumer sentiment remains gloomy. When we began tracking anxiety levels over the economic collapse in 2008, 46% of Boomers reported being anxious; this declined in 2009 to 34%, but has risen again in 2010 to 62%. And senior consumers show a similar trend, from 44% in 2008 to 34% in 2009 and up to 51% in 2010. The grey cloud overhead does not appear to be moving any faster than our rate of employment.
Boomers report stressors like job retention and health as contributing to their malaise. Seniors are most concerned with their health and the health of their family. Seniors are increasingly concerned about paying for their healthcare, the state of healthcare and elderly service delivery in this country, and most of all, not becoming a burden on their Boomer loved ones as both generations' resources are tapped dry.
Mature consumer behavior is complex. Pillars like affluence and health status are influential across a number of product categories.
But at the end of the day, the consumer's value system -- informed by these lifestyle attributes -- acts as the "behavior police." And that's why many consumer segmentation models may need a tune-up; they are based on values and lifestyle data. And mature consumer values have shifted.
First, there was the incredible collapse of companies and institutions where mature consumers had trusted relationships -- brokers, bankers, and financial advisors. The financial losses were one issue, but the collapse of trust was quite another. Then Boomers watched their only asset -- their home -- lose value overnight. And seniors who had hoped to leverage their equity to finance retirement housing, healthcare needs and inheritance watched as their careful plans went down in flames.
Recent Gallup analysis on polling during presidential administrations shows that trust in the current White House is at an all-time low. Likewise, trust in the news media to fairly, accurately and fully report the news is at all an all-time low. Even organizations like AARP, who support the issues of mature consumers, have suffered from a lack of trust over huge aging issues like healthcare reform.
The issue is not so much that mature consumers have responded differently, it is that they have generational memory. Seniors remember the Great Depression -- the sacrifice, the suffering and the long rebound. They hoped that their children, grandchildren and great-grandchildren would never experience this. They birthed the concept of the American dream that in many ways spawned the Baby Boom post-war.
And Boomers are aware of the sacrifice -- both in depression and war -- of this generation. They were given everything they needed to succeed in response to it -- "a better life" than their parents led. These memories are powerful and, in some ways, paralyzing. And so decision-making is difficult.
Regardless of when the economy really turns around, Boomer and senior consumers have changed. We have witnessed few modern events that shifted the values of the country so completely; the last is possibly 9/11. Continuing to operate "as usual" is not an option. Tune up your consumer insights and segmentation. You will find opportunity.